Next’s success in driving sales growth through its online channel showcases the benefits of a multichannel strategy, according to industry commentators.
Jon Copestake, retail analyst at the Economist Intelligence Unit, said the fashion retailer’s performance reflected “the exact trends underpinning the UK retail market at present,” showing the importance of a strong multichannel model.
Meanwhile, James McGregor, director of retail consultants Retail Remedy, said the retailer’s success was boosted by online and catalogue channels that “genuinely complemented” its physical stores.
The comments came as the fashion retailer this week reported online sales growth of 13.3% in the first half of its financial year. The rise helped the fashion retailer to a total sales rise of 4.5%, excluding VAT, in the 26 weeks to July 28, despite a weaker performance in store-based sales, which rose by only 0.2%.
The company said it expected to see full-year sales come in at between 2% and 4.5%, and “modestly” raised its expectations for profits in the 12 months. It now predicts they will come in at between £575m and £620m, against previous expectations of £560m to £610m.
Copestake said: “The chain has see declining like-for-like sales and weak growth in its bricks and mortar operations. But it benefits strongly from a multichannel approach, which has seen a double-digit growth in online and catalogue sales.
“Offering delivery or store collection from online channels has fitted into a flexible consumer friendly approach to services. Next is by no means alone in defying the economic gloom, with apparel retailers like Inditex, H&M and Primark outperforming other retail sectors. This will bode well when consumer sentiment finally begins to recover.”
McGregor added: “The success of the online and Directory channels reflects the trust people have in the Next brand,” he added. “They know that the things they order will be of the quality they expect. That’s no mean achievement on behalf of the retailer.”